At one point, Karmaloop was on top of the world. It was doing $100 million annually, owned a Corcoran-esque portfolio of web properties, and was the preeminent Boston institution – a promising example of new youth culture’s influence. No empire though is impervious to inevitability, and Greg Selkoe’s one-time retail giant currently holds the record for the highest-profile e-commerce site to file for bankruptcy in the modern age. The sudden decline in both cultural and economic relevance wasn’t truly blindsiding, but rather, a summary of bad business decisions. In a new piece posted just today, Complex‘s Adam Caparell explores the money-draining initiatives, stubbornness and disorganization that led to the fall of Karmaloop, including exclusive testimony from Selkoe himself. Peep the video above and a key excerpt below, then head here to peruse the full interview.
In 2011, Selkoe and the company started and staffed four new websites to cater to niche crowds. Included in those sites was Boylston Trading Co., an destination for the more refined male customer. Frank “The Butcher” Rivera was hired as creative director of the site, which was served up as an online magazine featuring interviews, product reviews, and high-end goods. The site debuted unique collaborations and sold merchandise from brands like accessories company Want Les Essentiels de la Vie and Alpha Industries. Another site, Miss KL, catered to Karmaloop’s female fans. The subscription service Monark Box mailed exclusive gear to members who paid a monthly fee.
This was during the e-commerce boom, when sites like GiltMAN were all the rage. Selkoe’s lenders, who had increasingly taken greater control of the company as they invested more money, encouraged him to build a “youth culture conglomerate” with specialty sites.
Costs quickly mounted and the returns didn’t justify the sites’ existence. Selkoe and Karmaloop realized they had bit off more than they could chew.